campaign finance

campaign finance, raising and spending of money intended to influence a political vote, such as the election of a candidate or a referendum.

Political parties and candidates require money to publicize their electoral platforms and to pursue effective campaigns. Attempts to regulate campaign finance reflect the commonly held belief that uncontrolled political fund-raising and spending can undermine the integrity of the democratic process and erode the confidence of the electorate in political institutions.

Campaign expenditures have grown in many countries since the turn of the 21st century. The rising cost of elections is particularly evident in the United States, where a large part of fund-raising and spending involves not the candidates and their parties but political action committees (PACs), whose campaign activities fall under regulations less stringent than those imposed on political candidates. Between 2000 and 2012 the estimated total spending for U.S. presidential elections almost doubled, from $3.1 billion to $5.8 billion. This massive growth in campaign finance is not peculiar to the United States, however, but is a global phenomenon.

Campaign finance raises fundamental ethical questions for democratic regimes. Most often, debates about campaign finance revolve around the protection of freedom of expression and the prevention of corruption, two democratic principles that can enter into conflict with one another. On the one hand, jurists have often considered financial participation in a campaign (either through donation or spending) to be a form of political expression that must be constitutionally protected from censorship. On the other hand, it is generally agreed that regulations and limits can justifiably be placed on campaign finance in order to prevent corruption.

By regulating campaign fund-raising and spending, governments seek to avoid a situation whereby politicians use the power associated with their office to reward large contributors. Even in the absence of any actual quid pro quo, large contributions can arguably contradict the democratic principle of “one person, one vote,” since contributors gain a privileged channel to express their interests and opinions. In addition to preventing outright corruption, campaign finance regulation thus seeks to limit the undue influence of money in politics. What represents undue influence is, however, itself a contested issue. The objective of campaign finance regulation can also be approached from a more positive perspective—namely, that it can be used to empower the greatest number of citizens to voice their concerns and aspirations in a campaign.

All states must face the problem of the role and influence of money in politics, but each answers this problem with different values and policies. In the United States, campaign finance regulations have focused on limiting partisan contributions (rather than limiting spending by campaigns). In the landmark Buckley v. Valeo (1976), the U.S. Supreme Court judged that, although contribution caps indeed limit freedom of expression, those measures are justified by the need for government to prevent corruption. On the other hand, because of a lack of evidence of a link between corruption and the use of a candidate’s own personal wealth to communicate a political opinion, the court struck down restrictions on expenditures by candidates on their own campaigns. In the controversial Citizens United v. Federal Election Commission (2010), the Supreme Court ruled that organizations such as trade unions and corporations were also protected from certain spending restrictions (namely, prohibitions on spending that is not coordinated with any political campaign) by the First Amendment of the U.S. Constitution. Four years later the court struck down aggregate limits on contributions by individuals to candidates for federal office, political parties, and political committees in McCutcheon v. Federal Election Commission (2014).

Other countries, such as Canada, placed limits on both contributions and spending. In contrast to its American counterpart, the Supreme Court of Canada ruled in such landmark cases as Libman v. Quebec (1997) and Harper v. Canada (2004) that restrictions could be implemented not only to prevent the undue influence of donors on officeholders’ decisions but also to counteract the capacity of affluent members of society to exercise a disproportionate influence on the election by dominating the debate. Whereas the U.S. Supreme Court emphasized individual liberty, the Supreme Court of Canada concluded that the government can also legitimately intervene to preserve the equality and fairness of the electoral process. In addition, many countries placed more-stringent restrictions on the financial participation of foreigners, both individual and corporate, in political campaigns.